Central Government is all set to roll out GST from July 1, 2017. Another revolutionary step has been taken. After Almost 7 hours, a day long discussion and crossing all the setbacks moved by the opposition parties, finally Lok Sabha managed to pass following four bills which were earlier passed by Union Cabinet on March 20, 2017:-

After the roll out of GST, dozens of Indirect Taxes will be subsumed to make the nation unified tax zone. The introduction of GST will restructure the complex tax structure and have a major impact on economic growth.

Let’s have a glimpse to these four bills which are recently passed in Lok Sabha, one by one:

1.Central Goods and Services Tax Bill, 2017 (CGST Bill, 2017)

A Bill to make a provision for levy and collection of tax on intra-state supply of goods or services or both by the Central Government and the matters connected therewith or incidental thereto.

This Bill will give powers to the centre to levy tax after levies of excise, service tax and additional custom duty is subsumed.

This Bill also provides for e- commerce companies to collect tax at source at a rate not exceeding 1 per cent of net value of taxable supplies, out of payments to suppliers supplying goods or services through their portals.

It will be applicable to whole of India (except the State of Jammu and Kashmir).

The CGST fixed the peak rate at 20 per cent.

2. Integrated Goods and Services Tax Bill, 2017 (IGST Bill, 2017)

A Bill to make a provision for levy and collection of tax on inter-state supply of goods or services or both by the Central Government and the matters connected therewith or incidental thereto.

This Bill provides for the levy and collection of tax on supply of goods and services between states.

It will be applicable to whole of India (except the State of Jammu and Kashmir).

3. GST (Compensation to States) Bill, 2017

A Bill to provide for compensation to the States for the loss of revenue arising on account of implementation of the goods and services tax in pursuance of the provisions of the Constitution (One Hundred and First Amendment) Act, 2016.

This Compensation Law will provides for levy of cess on top of the peak rate of the approved tax on luxury car, paan masala, tobacco, aerated waters and coal to create a non- lapsable fund for compensating States. In other words, products which are harmful for health will be taxed at 28 per cent and the difference from current rate will go to compensation fund

A Bill to make a provision for levy and collection of tax on intra-state supply of goods and services or both by the Union Territories (Chandigarh, Andaman and Nicobar Islands, Lakshadweep, Dadra and Nagar Haveli and Daman and Diu) and the matter connected therewith or incidental thereto.

This Bill will enable levy and collection of tax on supply of goods and services or both within a union territory.

No Inflationary Impact- It is expected that the tax rates will be kept at the current levels only.

Maximum Rate of GST- Government sets the maximum GST rate at 40%.

Boost on Economic growth – It is expected that after the launch of GST, the economic growth will be boost by near about 0.5 percentage points in its first year of implementation.

Slabs in the GST – The four slabs in the GST are 5%, 12%, 18% and 28%.

All the four bills after a day long discussion, finally approved by the Lower House of Parliament, next would be presented before the upper house of Parliament.

Author: C S Ekta Maheshwari is the Author of this article and is Company Secretary by profession. The Author can be reached at csektamaheshwari14@gmail.com

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